Have you ever marveled at the companies who always seem to come out on top, no matter what hand the economy deals them? Their secret is simple – they know when to grow and when to cut and they’re willing to take a few risks along the way. If you want your company to weather any economic storm, knowing how to manage growth and cutbacks is the absolute key. Let’s take a look at a few ways you can make sure your company succeeds, no matter what the future may hold.
Looking for Growth Indicators
The first step in sustainable growth is having enough reserve to support the growth, even if your company profits are sliding a little. While obviously you don’t want to put your company in a position of failure, if you’ve got a competitive product and you’re still secure in your market, don’t be afraid to hire new people and keep growing.
The second indicator is relatively simple – measure your return on your investment and if it is positive, don’t be afraid to go for it. Even in times of economic uncertainty, if you can turn a profit, you’ve got to take that opportunity.
Lastly, it’s also vital to understand your market completely as well as your competition. If your competitors are getting hit hard and you’re still doing fine, this is a great indicator that investing in growth is the smart decision.
Looking for Lag Indicators
There’s not always a silver lining in every cloud and if you see things starting to take a downturn, it’s very important to know when to cut your losses and start cutting back. Using the reverse of the above indicators, if your profits are continually sliding and your reserve is shrinking, it only makes sense to start cutting back to reverse this trend.
Other indicators to look for include being able to see a clear return on the money you’re investing. If you’re going to break even, or worse, end up losing money, it’s best to hold tight and look for areas to pare down. Another side to this equation is looking to see if narrowing your focus would actually improve your bottom line. For example, if cutting back and looking to a smaller market would actually place your company in a better position over the long-term, make the cuts while you still can.
None of us can know the future, but part of running a sustainable and profitable business is knowing how to forecast events. Pay attention to all of your indicators and don’t be afraid to act when you need to, whether it’s to grow or cut back.
How do you manage your market trends? SelecSource can help your find the staff that will help manage your market trends and improve overall performance.